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Judge rejects Durham motion to throw out indictment

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A federal judge on Thursday rejected Indianapolis financier Tim Durham’s months-long quest to have his indictment dismissed on the grounds that the government used wiretaps before it had court authorization to do so.

The ruling by federal Judge Jane Magnus-Stinson is a big setback for Durham and his attorney, John Tompkins, who in court papers had alleged “outrageous government misconduct.” Tompkins had sought dismissal, or at least a court order suppressing all the wiretap evidence the government obtained.

Stinson dispatched Tomkins’s arguments in a six-page order. She said this federal circuit does not recognize a doctrine of outrageous government conduct. So, she said, that would not be grounds for dismissal even if proven.

And she seemed untroubled by FBI testing of the wiretap on Nov. 2—four days before a federal court authorized tapping of Durham’s cell phone.

“Given that Mr. Durham has been unable to marshal any case authority for his claim that merely testing software in anticipation of obtaining judicial authorization violates the statute, the court finds the … testing here—conducted on FBI lines with only an FBI technician speaking—falls within the express authorization that Congress provided the wire-tapping statute,” Magnus-Stinson wrote.

“FBI technicians can conduct as many audio tests using their own phone calls as they wish.”

Federal prosecutors have used the wiretaps to help build a case that Durham, owner of Akron, Ohio-based Fair Finance Co., was operating the business as a Ponzi scheme.

FBI agents raided Durham’s office atop Chase Tower and Fair’s Akron headquarters in late November 2009, about a month after the wiretapping began. Fair Finance never reopened.

A grand jury in March 2011 indicted Durham, Jim Cochran and Rick Snow on charges of conspiracy to commit wire and securities fraud, wire fraud and securities fraud.

Durham and Cochran co-owned Fair Finance, while Snow was chief financial officer.

Prosecutors say that after buying Fair in 2002, Durham and Cochran raided its coffers to fund a lavish lifestyle as well as a host of money-losing businesses they controlled.

Authorities say Durham and Cochran pulled money out with such abandon that they left Fair without the means to repay Ohio investors who had purchased unsecured investment certificates from the company. More than 5,200 investors are owed more than $230 million.

Snow is accused of participating in the fraud, but unlike Durham and Cochran he isn’t accused of taking out millions of dollars in insider loans he lacked the means to repay.

Durham, Cochran and Snow deny wrongdoing. They’re all scheduled to stand trial in June.
 

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  • Greater Fool Theory
    The banks figured out his strategy to highly leverage his companies and play a shell game with intercompany transfers to hide losses years before it all came crashing down.

    The equity guys also knew his scheme to loot well funded corporate pension programs as part of his leveraged buyout strategy.

    The local banks cut him off, so he bought Fair Finance to cover maturing notes.
  • Geist Boy
    As a past senior level employee for one of his many failed "attempts" at running businesses I can tell you he simply pushed vendors out to as far as he could. Built up inventory to be able to borrow 85% of finished goods in inventory as allowed by banks.

    Only to have us leveraged to a point where we owed 15 million on a company worth about 3 million.

    He stole, they had a plan and it is not the economies fault. His companies couldn't make money because they owed more in interest payments then they generated in revenue.

    Not unlike our current government. He needs to go away for life!
  • Truth and Justice
    None of Durhams companies made money.

    They were shell companies used to launder money to himself and friends originating from Fair Finance.

    His business model was to drain Fair Finance of its cash, then declare bankruptcy leaving the clueless Amish investors holding the losses while he walked away with their hard earned savings.

    The poor economy just sped up the timeline as Fair Finance investors starting requesting draw requests instead of continuing their practice of making regular deposits.

    Durham was more a evil accountant than anything else.
  • No Surprise Concerning Durham
    Personal experience as a managr at Carpenter Manufacturing there is no surprise that Durham is crook. The comment about his theft of $20,000,000 from Carpenter has been around ever since he was kick out by the investors too late to save the company. So tell me that his not a crook and deserves to spend the remiander of his life behind bars!!!!!
  • REALLY???
    Geez... It's one think to be thought a fool...but something else to open thy mouth & remove all doubt! Oh, by the way...I have some Ocean front property in Kansas City, MO. that might interest you!...
  • Business Model??
    What Business Model did Durham have?? Take and then take more!! Ponzi's don't have a business model, but they do have a plan! Here's the plan, live your life to the fullest on someone else's retirement and/or savings. Then, when caught - play and look dumb. We can blame many things on the economy, but not Durham, Snow, and Cochran. Thank you, Judge Magnus-Stinson, for seeing through this snake.
  • LMAO
    You cannot be for real. Tim Durham is a crook and has always been a crook. The economy had nothing to do with it. He was stealing from the company. He stole over $20 million dollars years ago from Carpenter Manufacturing when he and his then Father-In-Law had that company. Lock him up!
  • Surprising
    The thing no one gets is that most of Durham's problems and business failures are beause the economy tanked. He was successful before Fair Finance and what you have is a bunch of investors in Ohio who say they were deceived...Well guess what..this is not true.....Do I agree with Durham's business model..no, but you cant say his operation was a scam

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